"By an act of the States of the 3rd of May, 1720, it appears that there was no longer any gold or silver in circulation: it had disappeared, having been sent out of the Island; and the only metallic currency remaining was that of _liards_, which it was probable would also disappear. The States, in consequence, found it impossible to repay the sums which had been generously lent, without interest, by individuals, for the works at the harbour; and in order to obtain a supply which was to enable them to pay their debts, and to avoid the loss accruing from the variable market value of the coins, they resolved on the adoption of a plan which could only increase the evil, and perpetuate the banishment of gold and silver coin. The States evidently confused the want of funds with the want of metallic money; for had they possessed the former, the latter would have been forthcoming. An easy mode of creating money, according to them, which was to enable them to pay their debts, without any detriment or cost to anybody (sans qu'il n'en coute rien a personne), and to build the harbour without any expense to the Island, was by the issue of a paper currency, from the circulation of which the public were to derive much benefit, and which, besides, would not be liable to fluctuation in value. They seemed not to be aware that a paper currency must be based on a metallic one; that it must represent, and be exchangeable for, a metallic currency, and therefore must follow the fluctuations of the latter in value; since, if not exchangeable, at the option of the bearer, for metallic value, it at once becomes depreciated, and drives from circulation the metallic currency by which it is designated. The lower the value of the notes, or paper currency, the greater will become the scarcity of the coin. Such would naturally be the result of the enactment of the States, for they decided on issuing notes of a very low value. For instance, there were to be 2,000 notes each of twenty sous. 1,000 " " " thirty sous. 1,000 " " " sixty sous. 1,000 " " " one hundred sous. 750 " " " ten livres. 500 " " " twenty livres. 300 " " " thirty livres. 240 " " " fifty livres. The aggregate amount of these notes was fifty thousand livres.